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91_HB4209
LRB9111227DJcd
1 AN ACT concerning tobacco proceeds.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Tobacco Product Manufacturers' Escrow
5 Act is amended by changing Section 5 as follows:
6 (30 ILCS 168/5)
7 Sec. 5. Findings and Purpose.
8 (a) Cigarette smoking presents serious public health
9 concerns to the State of Illinois and to the citizens of this
10 the State. The Surgeon General has determined that smoking
11 causes lung cancer, heart disease, and other serious
12 diseases, and that there are hundreds of thousands of
13 tobacco-related deaths in the United States each year. These
14 diseases most often do not appear until many years after the
15 person in question begins smoking.
16 (b) Cigarette smoking also presents serious financial
17 concerns for the State of Illinois. Under certain health
18 care programs, the State may have a legal obligation to
19 provide medical assistance to eligible persons for health
20 conditions associated with cigarette smoking, and those
21 persons may have a legal entitlement to receive such medical
22 assistance.
23 (c) Under these programs, the State pays millions of
24 dollars each year to provide medical assistance for these
25 persons for health conditions associated with cigarette
26 smoking.
27 (d) It is the policy of the State of Illinois that
28 financial burdens imposed on the State by cigarette smoking
29 be borne by tobacco product manufacturers rather than by the
30 State to the extent that such manufacturers either determine
31 to enter into a settlement with the State or are found
-2- LRB9111227DJcd
1 culpable by the courts.
2 (e) On November 23, 1998, leading United States tobacco
3 product manufacturers entered into a settlement agreement,
4 entitled the "Master Settlement Agreement", with the State of
5 Illinois. The Master Settlement Agreement obligates these
6 manufacturers, in return for a release of past, present, and
7 certain future claims against them as described in the
8 Agreement, to pay substantial sums to the State (tied in part
9 to their volume of sales); to fund a national foundation
10 devoted to the interests of public health; and to make
11 substantial changes in their advertising and marketing
12 practices and corporate culture, with the intention of
13 reducing underage smoking.
14 (f) It would be contrary to the policy of the State of
15 Illinois if tobacco product manufacturers who determine not
16 to enter into such a settlement could use a resulting cost
17 advantage to derive large, short-term profits in the years
18 before liability may arise without ensuring that the State
19 will have an eventual source of recovery from them if they
20 are proven to have acted culpably. It is thus in the
21 interest of the State of Illinois to require that such
22 manufacturers establish a reserve fund to guarantee a source
23 of compensation and to prevent such manufacturers from
24 deriving large, short-term profits and then becoming
25 judgment-proof before liability may arise.
26 (Source: P.A. 91-41, eff. 6-30-99.)